Question : 35. Alma Corp. issues 1,000 shares of $10 par value common : 1224813

35. Alma Corp. issues 1,000 shares of $10 par value common stock at $16 per share. When the transaction is recorded, a credit or credits are made to: 
A. Common Stock $16,000.
B. Common Stock $10,000 and Additional Paid-in Capital $6,000.
C. Common Stock $6,000 and Additional Paid-in Capital $10,000.
D. Common Stock $10,000 and Retained Earnings $6,000.

36. A corporation issues 1,500 shares of common stock for $32,000. The stock has a par value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for: 
A. $15,000.
B. $32,000.
C. $17,000.
D. $2,000.

37. The journal entry to issue 1,000,000 shares of $6 par common stock for $8.00 per share on January 2nd would be: 
A. Jan 2    Cash                                                         8,000,000
                   Common Stock                                                            6,000,000
                   Additional Paid-In Capital                                           2,000,000
B. Jan 2    Cash                                                         6,000,000
                   Common Stock                                                            6,000,000
C. Jan 2    Cash                                                         6,000,000
           Additional Paid-In Capital                        2,000,000
                    Common Stock                                                           8,000,000
D. Jan 2    Cash                                                         1,000,000
                   Common Stock                                                            1,000.000

38. Prady, Inc. began operations on October 1, 2011, with 3,000 shares of $2 par common stock authorized. Prady issued all of its common stock during 2011 and 2012. On December 31, 2012, Prady repurchased 1,000 shares of its outstanding shares, then reissued 500 of these shares on March 1, 2013. On June 1, 2013, Prady declared a 2-for-1 stock split. As a result of this stock split, which of the following is true? 
A. Assets decreased.
B. Stockholders’ equity decreased.
C. Stockholders’ equity increased.
D. Total stockholders’ equity remained the same.

39. If a corporation declares a 2-for-1 stock split, which of the following is true? 
A. A new class of stock must be authorized with twice the number of issued shares.
B. The number of outstanding shares is half the number that was outstanding before the split.
C. The number of outstanding shares is twice the number that was outstanding before the split.
D. The number of authorized shares is doubled, while the par value is reduced to half of the pre-split par value.

40. If a corporation declares a 2-for-1 stock split, which of the following is true? 
A. The amount of stockholders’ equity doubles as a result of the split.
B. The amount of capital stock doubles as a result of the split.
C. The price of each share will be doubled as a result of the split.
D. A stockholder who previously held 100 shares will have 200 shares after the split.

41. If a corporation declares a 2-for-1 stock split, which of the following is true? 
A. A journal entry is required to show the effect on the stockholders’ equity accounts.
B. The stockholders will have a higher proportionate ownership share after the split.
C. The par value will be reduced to half of the pre-split par value.
D. The market price of the stock is expected to increase after the split.

42. Magnum Corporation had 60,000 of its $3 par common stock issued before its recent 3-for-1 stock split. The market price of the stock was $30 per share before the split. Which of the following is true as a result of the split? 
A. There were 20,000 shares of common stock issued after the split.
B. The balance in the common stock account increased to $180,000.
C. The market price of the stock was not affected.
D. The par value of the stock decreased to $1 per share.

43. When a corporation decides whether to pay a cash dividend, which of the following is an important consideration? 
A. The balances in the corporation’s cash account to determine cash available for dividends.
B. The number of authorized shares of the corporation’s stock.
C. The book value of the treasury stock.
D. The balance of paid-in capital in excess of par on the corporation’s stock accounts.

44. When a corporation declares a cash dividend, which of the following is true? 
A. Cash decreases.
B. Liabilities decrease.
C. Equity decreases.
D. No entry is necessary.